Correlation Between National Health and Sabra Healthcare
Can any of the company-specific risk be diversified away by investing in both National Health and Sabra Healthcare at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining National Health and Sabra Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Health Investors and Sabra Healthcare REIT, you can compare the effects of market volatilities on National Health and Sabra Healthcare and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in National Health with a short position of Sabra Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Health and Sabra Healthcare.
Diversification Opportunities for National Health and Sabra Healthcare
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Sabra is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding National Health Investors and Sabra Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabra Healthcare REIT and National Health is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on National Health Investors are associated (or correlated) with Sabra Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabra Healthcare REIT has no effect on the direction of National Health i.e., National Health and Sabra Healthcare go up and down completely randomly.
Pair Corralation between National Health and Sabra Healthcare
Considering the 90-day investment horizon National Health is expected to generate 1.24 times less return on investment than Sabra Healthcare. But when comparing it to its historical volatility, National Health Investors is 1.07 times less risky than Sabra Healthcare. It trades about 0.1 of its potential returns per unit of risk. Sabra Healthcare REIT is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,015 in Sabra Healthcare REIT on August 27, 2024 and sell it today you would earn a total of 826.00 from holding Sabra Healthcare REIT or generate 81.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Health Investors vs. Sabra Healthcare REIT
Performance |
| Timeline |
| National Health Investors |
| Sabra Healthcare REIT |
National Health and Sabra Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Health and Sabra Healthcare
The main advantage of trading using opposite National Health and Sabra Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Health position performs unexpectedly, Sabra Healthcare can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sabra Healthcare will offset losses from the drop in Sabra Healthcare's long position.| National Health vs. Global Medical REIT | National Health vs. Healthpeak Properties | National Health vs. Ventas Inc | National Health vs. Omega Healthcare Investors |
| Sabra Healthcare vs. Healthcare Realty Trust | Sabra Healthcare vs. Healthpeak Properties | Sabra Healthcare vs. Community Healthcare Trust | Sabra Healthcare vs. Universal Health Realty |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |